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Are there any legal risks when leasing a commercial property?

On Behalf of | Jan 22, 2024 | real estate

Leasing a commercial property can be a significant milestone for businesses looking to establish a physical presence. However, it is important to navigate this process with diligence.

As a commercial tenant, there are potential legal risks that you should be aware of before signing any lease agreement. Being mindful of these concerns can help you understand your rights, obligations and possible legal options in the event of a dispute.

Lease agreement terms

The terms outlined in a lease agreement are the foundation of the landlord-tenant relationship. It is in your best interest to thoroughly review and understand these terms. Any ambiguity or oversight may lead to disputes down the road. Pay special attention to clauses related to rent increases, maintenance responsibilities and lease duration.

Maintenance and repairs

Commercial property leases often specify the maintenance responsibilities of both parties. Tenants must uphold their obligations regarding property upkeep. Failure to adhere to maintenance requirements could result in legal consequences, financial penalties or even eviction.

Compliance with zoning regulations

Zoning laws dictate how you may use your leased property. Violating these regulations can lead to legal repercussions. As a potential tenant, be sure to conduct thorough research and ensure that your intended business activities align with the zoning requirements of the leased property.

Subleasing considerations

Some businesses may consider subleasing part of their commercial space to other tenants. However, before pursuing this option, make sure to examine the lease agreement for any restrictions on subleasing. Violating these restrictions can result in legal action from the landlord.

Lease termination

As a business owner, it is important to consider the possibility that you might wish to terminate your lease in the future. This might be due to a decline in business or a desire to move your operations to a different property. That is why you should understand the conditions that will allow you to terminate your lease. Terminating a lease under circumstances not specified in the document itself can lead to legal consequences and financial liabilities.

When you are operating a business, avoiding a landlord-tenant dispute is a top priority for minimizing business disruptions. Knowing the legal risks and taking appropriate action to avoid them is an important step for a commercial lessee.